We first flagged this X back in November 2009, when we noticed something weird in the way global investors were pricing bond market risk. Risk premiums on corporate debt were flat-lining, but the cost of insuring against sovereign default had started to rise sharply.

Within months we were in the midst of a full-blown sovereign debt crisis where investors squared off risk trades, equities and commodities were sold off and the US dollar gained an unexpected fillip.

This quickly took the shine off what could otherwise have been a year of robust risk returns.

So what might “X" be in the coming 12 months?

I thought I’d nominate three factors capable of fitting the bill – two with the capacity to deliver upside surprise, and one capable of dashing hopes of a strong 2011.

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Let’s start with the first of the positives – the potential for unexpectedly strong private sector spending as the US government starts to wind back two years of aggressive fiscal accommodation.

I sense this is already in train as the US Federal Reserve’s latest flow of funds report confirms a drop in the corporate and household savings rate and the first real signs of an easing in federal government spending.

To date, we’ve seen a US recovery that has largely been driven by the public sector, whether through direct outlays or through tax and social welfare support. The government spending took up the slack caused by reduced consumer and business outlays as the private sector wound back unsustainably high leverage.

I’m expecting the current quarter to be the first to reflect growth driven primarily by private sector inputs. But it will be how business responds in early 2011 that determines whether we’re headed for an OK or a great growth outcome. I’ll be keeping a particularly close eye on the corporate savings rate. This is now running at 2.7 per cent, after peaking at more than 4 per cent.

Ideally, this will need to be back to zero if we’re to see the level of capital spending and jobs creation needed to make a serious dent in the unemployment rate. By this I’m thinking a jobless rate of 8 per cent by late 2011, and a move back to 6.5 per cent by 2012.

This may seem unlikely right now as US unemployment is pushing 10 per cent. But that’s the beauty of “X" – it’s a measure of the unexpected.

Alternatively, it could be the euro zone that delivers the biggest positive surprise in 2011. The year is starting with investors extremely wary of more cross-border contagion. There’s even talk of runs on Belgium and Italy.

What’s clear is we won’t see a lasting solution until Germany recognises the need for fiscal federation – for a euro zone-wide rather than national approach to tax and spending that ultimately relies on the creation of a single euro-zone bond.

While attaining a workable structure will take months, I sense we could be within weeks of reaching an in-principle agreement to move towards a unified fiscal solution. That’s an “X" that would trigger a surge in the euro and create a 2011 win-win for risk asset bulls.

This just leaves my downside X: inflation.

It may sound improbable, given prevailing concerns over US and European deflation. But inflation still tops the central bank danger list and any hint that prices are on the rise could swiftly change perceptions of where rates are heading. We’re seeing this in the United Kingdom, where prices have surprised on the upside. Consequently, analysts have begun to factor in a possible rate rise in late 2011.

I see three potential triggers – commodities, the output gap and the money multiplier.

On commodities, the year is starting with a strong upward bias. Oil, base metals and grains are all responding to strong emerging market demand and better US economic activity. We’re already seeing heightened inflation concerns across Asia. Add another $US20 to oil and suddenly it’s a global concern.

The output gap is a tricky one. Most measures still show a big shortfall between actual and potential output in the US and Europe. But this assumes measures of potential capacity are accurate. But what if the recession has delivered permanent, rather than temporary, losses to potential capacity? Then we’re talking much smaller output gaps. And that’s inflationary.

Then there’s the money multiplier. We know the banking system is flush with excess liquidity that’s been side-lined as borrowers have sat on their hands. But it wouldn’t take much to see it flow into the real economy, if private-sector confidence continues to recover.

The risk then is that central banks respond by hastily hitting the monetary brakes.

We’ll find out soon enough whether any of these three Xs have an impact on the investor psyche in 2011.